President Bush is meeting with congressional leaders as both sides brace for a heated battle over the federal budget. Mr. Bush is continuing to stand by his tax cut plan. But Democrats are lashing out at his economic policies.

With the new fiscal year beginning on October 1, Congress is rapidly running out of time to pass the necessary legislation to fund the U.S. government.

Complicating matters is the fact the budget surplus is shrinking rapidly due, in part, to President Bush's tax cut plan.

The dwindling surplus will increase tensions in the legislature as lawmakers sift through various budget priorities. And there is no doubt, the anxiety level will be highest in the Senate, where Democrats recently moved into the majority.

President Bush summoned Senate leaders to the White House on the first day of legislative business after a month long recess. He told them that despite the downturn in the surplus and the economy, there is still plenty of money to fund important programs. "I am confident we can come together and get a good budget together, one that will reflect the priorities of the nation, which would be education and defense," he said.

He got no argument from the top Republican in the Senate, Minority Leader Trent Lott. "We need to set priorities," he said. We need to be fiscally responsible. And I believe we can do that.

A few hours later, Senate Democratic leader Tom Daschle arrived at the White House for a separate meeting with the President. Reporters surrounded Senator Daschle as he left the Oval Office, looking for signs of conflict. The Senate Majority Leader was diplomatic but firm, denying the President's contention that the biggest threat to the budget is congressional overspending.

"The Democrats are going to stay within the budget that we were given. We didn't agree to that budget but we have lived within it so far. We have not spent a dollar more than what the President has requested so far this year," he said.

Senator Daschle referred several times to the government's pension reserves, the billions of dollars in taxpayer contributions to the Social Security fund set aside for future payments.

Social Security is perhaps the most popular government program in the United States. Democrats have warned the government may have to tap these reserves to make up for a revenue shortfall. But Mr. Daschle said he was assured by the President that will not happen.